HealthFirst to lose tax dollars; Board of Health to find new entity to serve

Tax dollars going to support HealthFirst Bluegrass will end, and the Board of Health will seek out a new entity to serve the medical needs of thousands of poor and uninsured in Fayette County. The board also will work with the new entity to build a new $11.7 million public health clinic.

HealthFirst had planned to raze this building at 496 Southland Drive in Lexington and replace it with a clinic.
Lexington Herald-Leader

Former HealthFirst Executive Director William North, right, received an $80,000 severance deal after being asked to resign.
Herald-Leader

Tax dollars going to support HealthFirst Bluegrass will end, and the Board of Health will seek out a new entity to serve the medical needs of thousands of poor and uninsured in Fayette County. The board also will work with the new entity to build a new $11.7 million public health clinic.

The decision approved by the Fayette County Board of Health Monday is an administrative one, and the 138 employees working in the public health clinic will continue to be employed.

"The staff is not the problem," said Board of Health chairman Scott White, "the problem has been the executive director and the senior management of the board (of HealthFirst)."

The vote means that the Aug. 28 firing of Executive William North by the Board of Health will stand. The board of HealthFirst will not have a role in operating the public health clinic or building a new building to expand services at Southland Drive.

Each board operates independently, but the Board of Health has a financial investment in the HealthFirst operation. HealthFirst receives $1.2 million from Fayette County in health tax revenues annually. The Board of Health has also loaned HealthFirst $1.6 million in tax dollars.

Work to find a new organization to partner with will begin immediately, White said. "We are going to explore our options very quickly," said White.

The struggle has been ongoing for several months, since Kentucky State Auditor Adam Edelen released a report on HealthFirst that was critical of the hiring process for Ted J. Mims, who is the project manager on the clinic. The auditor's report also said HealthFirst had been overly aggressive in predicting an increase in patients. Executive Director William North maintained that HealthFirst had no serious issues that needed to be addressed. On Aug. 15, the board of HealthFirst said it would have to pull the plug on the construction grant if the Board of Health or local banks did not provide more financial assistance.

The Board of Health has asked HealthFirst board to detail how they are going to address concerns raised in the auditor's report and had not been satisfied with the response, White said. HealthFirst has until Sept 25 to respond to the auditor's office directly.

"We have directed HealthFirst to do certain things and we have not heard back from them," said Board of Health attorney Phil Scott. "We need to take action."

White said the Board of Health has had lengthy discussions with the Health Resources and Services Administration, the federal agency overseeing the $11.7 million construction grant, and thinks the Board of Health has the authority to move on and retain the grant.

Although no Board of Health member voted against the measure, concerns were raised.

Board of Health member Sandy Cannon said she was concerned cutting ties with HealthFirst could do more harm than good. "I am very concerned that we are creating more disruption in a very disruptive process," she said.

Dr. Rice Leach said it was important to act because patients and staff need to be able to get on with the business of taking care of people "so we don't lose staff, we don't lose patients and we don't lose hope."

Dr. Deborah Stanley, HealthFirst's medical director, said the turmoil is taking a toll on staff and patients. She said five percent of staff have left and, she said, patients are asking her staff whether they need to be looking for another doctor. "This has to be settled quickly," she said. A timeline and a written proposal is needed to quell concerns, she said.

Board of Health member Kacey Allen-Bryant said repeatedly during the hour-long discussion she was uncomfortable with what she called a drastic measure. She abstained from voting.

Dr. John Loventhal said, who is the liaison from the HealthFirst Board to the Board of Health, said HealthFirst board members have never had a clear understanding of what action HealthFirst could take to help resolve the dispute.

About $1 million has been spent on the project so far and Board of Health Member Chris Ford said there is little to show for it.

The vote came after a glowing report by Stanley that touted an increase in patients being treated, increasing the number of school clinics, adding mental health care and improving policies and procedures.

"I have wanted to expand for years and we are finally growing," said Stanley, who has worked for the health clinic since 1985.

"I am so proud of the staff that works here," she said. "We have a great staff."

Dr. Gary Wallace, Board of Health member, praised the staff for being "the stabilizing force that has helped keep things going from day to day."

Richard Getty, a lawyer representing both North and Mims, said he thinks the Board of Health is acting in violation of the federal grant and he thinks there has long been a plan on the part of certain city officials to bring in another entity to do the work of HealthFirst.

He said the vote turns a situation that could have been repaired into "an absolute, veritable mess."

HealthFirst Board chairman T.A. Lester said Monday following the meeting he didn't have enough information about the Board of Health's action to comment.

Praised for working for free on health clinic, developer submits $75,000 bill

Just weeks after being praised for working without pay, the project manager of the stalled public health clinic on Southland Drive has submitted an invoice for $75,000 for overseeing the project.

At a meeting Aug. 15 of the HealthFirst Board of Directors, building committee chairman Tom Burich said that Ted J. Mims, the building project manager, believed in the project so much that he offered to oversee the construction of the $11.7 million, tax-funded clinic for free and has not been paid since May.

The invoice brings Mims' total payment on the yet-to-be-built project to $150,000.

Richard Getty, a lawyer representing Mims, has said that Mims submitted the invoice on his advice.

"He's done the work, he deserves to get paid," said Getty.

How Mims was hired was examined during an investigation of HealthFirst by Kentucky State Auditor Adam Edelen. The auditor found Mims had been pre-selected for the job — which pays $15,000 a month — over other candidates. Getty says the hiring is sound. The invoice, obtained by the Herald-Leader through an open-records request, was submitted by Mims to Executive Director William North on Aug. 30. North was fired from that position by the Board of Health on Aug. 28.